As you grow older, planning your estate becomes increasingly important, especially for anyone with substantial assets that will need to be distributed once they pass on. While most people focus on writing a will when thinking about estate planning, there are other options available that can help you manage your assets and ensure they pass down to your loved ones when you’re gone. For example, some may wish to consider the potential benefits of a testamentary trust when planning their estate.
A testamentary trust is a kind of trust that is organized for the purposes of safeguarding property that will be distributed upon the death of the one who organized the trust. Like other kinds of trusts, a testamentary trust is organized by a grantor who hands his property over to a trustee, who is legally required to protect and manage the property on behalf of the grantor. The primary distinction is that the beneficiary of the trust only receives the property in the trust once the grantor dies.
There are multiple benefits to using a testamentary trust. First, property held in a trust is shielded from taxation, protecting the value of the property on behalf of your beneficiaries. Second, creditors who might want to take from the estate to satisfy any outstanding debts will not be able to touch the property in the trust. And finally, a testamentary trust can allow for a significant degree of control over how your property is distributed to your beneficiaries, depending on the terms you set out for the creation of the trust.
Ensuring that assets are protected and passed on to loved ones remains a vital objective in our ever-changing and complex society. Wingate, Kearney & Cullen, LLP assists our clients in achieving these goals through a diversified trusts and estates practice. For more information or to schedule a consultation, call (718) 852-5900 or fill out our contact form.